Polestar owners left ‘holding the bag’ after EV brand pulls out of the US

Last month, Polestar shocked the auto industry when it announced that it was pulling out of the US.

The EV company’s decision came after the federal government denied its authorization to continue selling its cars despite a rule banning vehicles with Chinese-made connected vehicle software. Polestar, which is headquartered in Sweden but majority owned by China’s Geely, said it would stop selling its vehicles in the US starting with the 2027 model year.

For the thousands of Polestar owners and dozens of dealers in the US, it was a moment of disappointment and uncertainty. What would happen with their vehicles? Who would service them? Would they still get software updates? And at a time of record-high rates of EV depreciation, what would happen to the value of their cars? With these questions swirling, many are now looking around for someone to blame — and are not coming up with any obvious answers.

“It feels like we’re the ones left holding the bag, with no compensation for the sudden loss in market value on cars we just bought or leased,” said DL Byron, an inventor and content creator from Washington state, who picked up a certified pre-owned Polestar 2 just days before the company announced it was shutting down in the US. “At this point I have to trust that Polestar will honor its warranty and service commitments.”

Volvo, which is also majority owned by Geely, has received authorization from the Commerce Department to keep selling its vehicles in the US despite its Chinese ties — a fact that also burns Polestar owners.

“The ‘brand‑within‑a‑brand’ model failed in the U.S., and that’s on Polestar — not on the owners who bought in,” Byron told The Verge. “We deserve better.”

Matthew Haiken, who owns a Polestar dealership in Short Hills, New Jersey, says that state franchise laws typically provide protections if an automaker goes bankrupt or voluntarily leaves the US market. Those protections exist because dealers make substantial investments that cannot easily be repurposed, including exclusive Polestar signage, long-term real estate leases, and specialized replacement parts.

But this situation is different, since Polestar isn’t going bankrupt or pulling out of the US because of low sales. Instead, it’s being muscled out by a Biden-era rule that prohibits the sale of any vehicle with connectivity software that originates from “countries of concern,” which includes China, Russia, and Iran.

“This is the first time that anyone has said, ‘Hey, this is not us. It’s outside our control. It’s the government,’” Haiken told The Verge. “So we’re left very vulnerable.”

Regardless of whether new vehicle sales end, Haiken’s dealerships have ongoing legal obligations that they can’t just ignore. In New Jersey, Polestar vehicles carry an eight-year battery warranty, while California requires a 10-year, 150,000-mile battery warranty. Dealers therefore must remain available to perform warranty repairs for years into the future — even though new vehicle sales will have ceased by then. Dealers also manage substantial lease portfolios, meaning they will need to accept lease returns, purchase those returned vehicles, and resell them on the used market.

“It’s still too new to know what the future holds,” Haiken added. “We have to be here for our customers, but what does that mean? How does it work? I don’t know at this point.”

Polestar says it is working with its retail representatives to manage the transition. “Existing Polestar owners and lease customers will continue to receive the same level of support and access to service as they do today,” Polestar spokesperson Michael Ofiara said in a statement. “All existing warranties remain in effect and will continue to be honored in accordance with their terms and conditions.

There almost isn’t any precedent for this. Unlike Fisker, the EV brand that went bankrupt, stranding its customers without service or parts, Polestar will continue to exist in other countries. The company has said that “94 percent of retail sales volumes in the first quarter of 2026 originated from markets outside the US” — though some of its US dealers dispute that figure.

Haiken says despite the uncertainty, he intends to stay in business for as long as he can. (He also runs several non-Polestar dealerships.) In fact, he expects sales to pick up in light of the deep discounts — up to $25,000 off — on Polestar 3 and Polestar 4 models that were recently announced. Haiken interprets this as evidence that customers remain confident the dealer network will continue supporting them.

Still, other dealers may decide to shut down. On Reddit, a Polestar lessee reported that service centers in San Francisco and San Jose are in the process of being dissolved, which could force him to travel over 300 miles to Los Angeles to return his vehicles when the lease runs out. (A Polestar dealer responded that Volvo dealerships in nearby Marin County would likely accept the person’s vehicle.) The company told Reuters recently that it has 32 service centers in the US, many of which are co-located with Volvo dealerships.

“If more dealer groups walk away, what does the service map look like?” asked Byron, the recent Polestar 2 owner. “Polestar’s statement promises a maintained service network. The open question is whether they’ll run it themselves, the way Rivian and Tesla do.”

Haiken says his dealership will have to find new uses for some of its facilities — and other dealers are likely also wrestling with hard decisions. A million-dollar-plus dealership with no vehicles to sell suddenly becomes a real drag on the balance sheet. Volvo, from which Polestar originally spun out, isn’t going to want to share its retail and service space with a defunct brand in perpetuity.

“I don’t think there’s excess capacity there,” Haiken said. “Nor does a brand that invests millions of dollars in building equity and marketing … want another brand infringing on their footprint.”

Haiken predicts a lot of Polestar dealers are going to end up downsizing or closing down entirely. It’s a grim time for the brand, and EVs in general. Grappling with policy shifts, automakers have been struggling to pivot to cheaper, more profitable battery-powered vehicles. And EV sales in the US are still tumbling, down 22 percent year over year in the second quarter of 2026.

But Haiken is still convinced that EVs are the future.

“EV — the drive, the instant torque, the lower costs of ownership over the life of the car — is a superior tech,” he said. “And at the end of the day, I know it’s gonna win.”